Oil prices extended gains in early trade on Thursday, with Brent crude edging toward $102/barrel, as escalating hostilities between the US and Iran in the Middle East stoked fears of prolonged supply disruption.
- Iran says it will continue military operations as US blockade squeezes exports
• Attacks on commercial ships heighten concerns over Mideast energy supply
• Hormuz vessel traffic stays below normal
Brent crude was on course for a fifth consecutive day of gains after settling on 9 September at $101.21/barrel, its first close above the $100/barrel threshold since 24 July.
The benchmark oil price has surged by almost 70% so far in 2026, although it remains below the wartime peak of $126.41/barrel hit on 30 April.
Concerns that the conflict is intensifying have continued to build since the weekend, with daily reports of fresh military action between the US and Iran adding to the geopolitical risk premium in oil markets.
On 9 September, Iran said it would step up military operations if the US continued attacks on its territory, while a US-led naval blockade continued to sharply constrain Iranian oil exports.
Quoting an unnamed senior Iranian official, newswire agency Bloomberg reported that Tehran had no intention of backing down and would continue fighting, even as economic pressure from the US naval blockade intensified.
US President Donald Trump on 9 September told reporters before boarding Air Force One for a trip to Dallas, Texas that the US-Iran war will end “immediately” after the November midterm elections in the US and predicts falling oil prices, adding that negotiations with Iran “could happen”.
SHIPPING ATTACKS DEEPEN SUPPLY CONCERNS
Oil prices surged on 9 September after a wave of attacks on commercial shipping in and around the Strait of Hormuz and other Gulf waters, reinforcing concerns about further disruption to Middle East oil flows.
Concerns over a prolonged conflict intensified after Iran attacked a US military base in Jordan earlier this week following US strikes on Iranian crude tankers.
On 9 September, a tanker carrying around 2 million barrels of Iraqi fuel oil was struck by a drone in Iraqi waters, while the UK Maritime Trade Operations (UKMTO) reported multiple commercial vessels coming under fire in separate incidents around the Gulf region.
UKMTO said several merchant vessels and tankers operating in the Northern Arabian Gulf and Gulf of Oman were involved in security incidents between 8-9 September amid ongoing US-Iran military attacks in the region.
In one incident reported on 9 September, a tanker was struck by an unknown projectile around 28 nautical miles southeast of Al-Faw, Iraq, although all crew were reported safe and no pollution was detected.
Later the same day, UKMTO received a third-party report that a tanker anchored about 24 nautical miles northwest of Port Rashid in the UAE was listing after a suspected projectile strike. Authorities were investigating the incident.
Heightened maritime security risks have also driven up cargo insurance premiums, with costs now estimated at around 5-6% of cargo value.
Meanwhile, Kuwait Petroleum has begun offering ship-to-ship transfers outside the Strait of Hormuz to help buyers mitigate transit risks through the waterway, according to media reports.
In Saudi Arabia, attacks on energy facilities in the southern region by Yemen-based and Iran-backed militant Houthi forces this week threaten Middle East supplies via the Red Sea – an alternative to the Strait of Hormuz, which has remained effectively closed for more than six months.
HORMUZ FLOWS REMAIN CONSTRAINED
The Strait of Hormuz remains central to market concerns because it normally handles around one-fifth of global oil and gas trade.
US energy secretary Chris Wright said on 9 September that just under 11 million bbl/day of crude and refined products were currently moving through the waterway.
Shipping activity remains well below normal levels.
On 8 September, six commodity vessels passed through the strait, down from nine a day previously and below the recent 10-day average of around 12 vessels, newswire agency Reuters reported citing data from shipping analytics firm Kpler.
According to Norwegian consultancy Rystad Energy, flows through Hormuz had recovered to around 8 million-9 million barrels/day in the week before fighting resumed on 30 August, but have since fallen below 2 million barrel/day.
Market participants are also awaiting release of US crude inventory data from the Energy Information Administration (EIA) later on Thursday.
Source: ICIS, by Nurluqman Suratman
